On the 2016 Budget – Super or not?
So we have a new Budget delivered tonight.
What does it all mean? High points as we see them:
- increase in threshold for the second highest marginal rate increases from $80,000 to $87,000;
- small business is now defined as a business with a turnover of up to $10m (increased from $2m) – this is a good thing and will be appreciated by a number of our customers
- limit/cap of value a retiree can put into their retirement account of $1.6m (this is a different approach!) – it is going to have an impact on those of you with large super accounts. Sure, there aren’t a lot of you out there, but you will be impacted in a not so great way with this.
- concessional super contributions maximum is reduced again to $25,000
- lots of mucking around with super which will only serve to make it more confusing – they cannot help themselves!
- new focus on internships for young unemployed people – this looks interesting and is potentially a sensible approach – using the funds that were used to pay welfare to support businesses who employ under this program. This is possibly a far better use of the funds.
- focus on chasing the multinationals – not really a concern for our customers!
- reduction in company tax rate to 27.5% from 28.5% for businesses under $10m turnover with an expansion in the level of businesses that qualify for the reduced rate in coming years
Initial feedback from the media seems to be pretty positive, but, as always, “the devil is in the detail”.
There will be a lot of analysis of the budget in the coming days – and lots more information will come out. The growth and unemployment forecasts in the figures look OK and the deficit projections are (as usual), pretty bullish.
Couple all that with the reduction in interest rates by the Reserve Bank to day and you might just think we were heading towards an election!
Once we have had a chance to review the budget in more detail, we will provide more information to you.